Question: A two - year project has been evaluated and has an NPV on an after tax basis of - $ 2 0 0 0 .

A two

-

year project has been evaluated and has an NPV on an after tax basis of

-

2000 .

On reviewing the analysis the Finance Manager found that depreciation had been omitted from the tax analysis. The allowable depreciation for tax purposes is $

5000

for each year. Using a tax rate of

30 %

and and a discount rate after tax of

12 %

,

determine the correct NPV for the project

(

to the nearest dollar

) .

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